Federal SBA Relief: Economic Injury Disaster Loan
A. Basic Information
If you operate a small business (table with figures to assist you in determining whether your enterprise qualifies as a “small business” located here) and your business is in a state approved for disaster loan assistance (as of March 17, 2020 those states include: California, Connecticut, Idaho, Maine, Massachusetts, New Hampshire, New York, Oregon, Rhode Island, and Washington), then your business MAY qualify for a low-interest Economic Injury Disaster Loan (EIDL). Basic information regarding EIDL follows:
- EIDL can be for up to $2 million
- Unsecured loans for up to $25,000
- Terms for up to 30 years
- Loans may be used for: working capital, paying fixed debts, payroll, accounts payable, other bills that could have been paid had the disaster not occurred
- Loans MAY NOT be used to replace lost sales/profits or for purpose of expansion/growth
- Applicants can qualify even if they have an existing SBA loan
- All loans approved will have the payment deferment set at 12 months from the date of the Note. This reflects a deferment of 11 months with the first payment due on the 12th month.
- The loans credit requirements:
- Acceptable credit history
- Proven ability to repay the loan
- Collateral required for loans over $25,000
B. EIDL Application Process
All EIDL applications will require the applicant to fill out the forms detailed in “Basic Forms.” Applicants should also review “Supplemental Information” to ensure that their application is ready to be reviewed for a determination.
i. Basic Forms
- Completed SBA loan application (SBA form 5)
(for sole proprietors/home-based businesses, fill out Form 5c)
- IRS Form 4506-T completed and signed by Applicant business, each principal owning 20% or more of the applicant business, each general partner or managing member and, for any owner who has more than a 50% ownership in an affiliate business. (Affiliates include parent company, subsidiaries, and/or businesses with common ownership or management).
- Completed copies of the most recent Business Federal Income Tax return – all pages
- Schedule of Liabilities (SBA form 2202)
- Personal Financial Statement (SBA form 413D) – each principal owning 20% or more of the applicant business, each general partner or managing member.
ii. Supplemental Information
- Completed copy, including all schedules, of the most recent personal Federal income tax returns for each principal owning 20% or more of the applicant business, each general partner or managing member, and each affiliate (affiliates include parent company, subsidiaries, and/or businesses with common ownership or management).
- If you do not have completed 2019 business tax returns, submit year-end profit and loss statement and balance sheet for 2019.
- Current year-to-date profit and loss statement
Monthly Sales Figure (SBA form 1368)
Prospective applicants should visit https://disasterloan.sba.gov/ela/Information/EIDLLoans as they prepare to apply for an EIDL.